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Wage council recommends S$60 raise for lowest earners

SINGAPORE — In spite of the economic recovery and a new Government scheme which directly subsidises wage increments, the National Wages Council (NWC) has recommended a minimum monthly increment of S$60 — just a shade more than last year’s recommended S$50 raise — for workers earning a basic salary of up to S$1,000 a month.

SINGAPORE — In spite of the economic recovery and a new Government scheme which directly subsidises wage increments, the National Wages Council (NWC) has recommended a minimum monthly increment of S$60 — just a shade more than last year’s recommended S$50 raise — for workers earning a basic salary of up to S$1,000 a month.

Releasing its latest guidelines yesterday, the NWC also expressed concern that, as of December, only three out of 10 non-unionised companies adopted its recommendation last year for a minimum wage increase for low-wage workers. In contrast, four out of five unionised firms heeded the call.

Acknowledging that low-wage workers required “special attention and assistance”, the NWC noted that income growth for this group has “lagged the rest of the workforce” while these workers have borne “increasingly high” cost of living.

NWC’s guidelines last year marked the first time since 1984 that it had recommended a minimum quantum of pay rise. The move to recommend quantitative guidelines for the second year running comes after the Government announced a S$3.6 billion Wage Credit Scheme in this year’s Budget which covers 40 per cent of increments for the next three years for those earning not more than S$4,000 each month.

At the press conference, the NWC noted that the economy is on the path to recovery, with growth projected at 1 to 3 per cent this year.

NWC Chairman Lim Pin said the quantum was decided after “intensive discussions” among tripartite partners to be a “fair and achievable” target.

“On the one hand, we urge the employers to do more. On the other hand, it has to be an achievable target and not something wild,” he said.

“I want to reassure you that it’s the result of a lot of hard work.”

Singapore National Employers Federation President Stephen Lee, a member of the NWC, said that it was “dicey” to link the Wage Credit Scheme with the NWC’s recommendation on wage increments. “Because when the (scheme) goes away, you cannot take away the wage increase,” he said.

He added that employers who follow NWC’s guidelines may not necessarily be able to tap the scheme if their total annual wage bill — because of lower bonuses — is not higher.

Mr Lee said that the adoption rate for last year’s guidelines was “a very encouraging start”. He added that reaching out to the employers was the issue and cited organising more briefings on NWC’s guidelines, including in dialects and different languages, as one way to get more companies on board.

In a media statement, NTUC said it “fully supports the fair recommendations ... in view of Singapore’s current thrusts in economic transition and inclusive growth”. However, it felt more can be done to ensure the NWC’s guidelines are followed in the non-unionised companies. NTUC Vice-President K Karthikeyan questioned why some 75 per cent of the non-unionised sector have not adopted last year’s recommendations to increase wages, despite more than 80 per cent of Singaporean companies reporting to be profitable. The union will look into naming and shaming those which do not have a good reason for not doing so, he added.

Labour Member of Parliament Zainal Sapari also said that the labour movement had initially “pushed for a higher quantum” for this year’s guidelines.

Mr Zainal, who is the Director of the Unit for Contract and Casual workers at the National Trades Union Congress (NTUC), declined to disclose what the higher quantum was. Nevertheless, he said that the NWC’s guidelines this year aims to “build on the momentum” from last year’s recommendation.

The low adoption rate of NWC’s guidelines last year also threw up the question of how better to help the low-income, such as through raising the wage-threshold of S$1,000.

In response to TODAY’s queries, a Ministry of Manpower spokesperson said there were about 150,000 full-time resident employees — Singaporeans and Permanent Residents — below the S$1,000-line last year.

Prof Lim said: “The S$1,000 cut-off is something that we also have been thinking about — what is the basis for that and whether we should change it. It’s something that we’ve been working on continuously.”

Chua Chu Kang Member of Parliament Zaqy Mohamad, who sits on the Government Parliamentary Committee for Manpower, agreed that this was something for the NWC to look into. He suggested creating another category — those earning between S$1,001 and S$2,000, for example — for which the NWC also pays attention to, or better yet, pegging the threshold to percentile-earnings so that the guidelines do not become “blunt tools”.

The NWC also reiterated that real wage increases should be in line with productivity growth over the long term so that these are sustainable and will not hurt our economy’s competitiveness. It also urged employers to share productivity gains fairly with workers and in a sustainable manner.

The Government has accepted the NWC’s recommendations. ADDITIONAL REPORTING BY EUGENE NEUBRONNER

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